Director Jiang, Staff of Xinhua News Agency, Hong Kong Branch, Ladies and Gentlemen,

It is a great pleasure for me to join you at this Spring Reception held by the Xinhua News Agency, Hong Kong Branch. May I take this opportunity to wish every one of you here a prosperous new year.

Just now, Director Jiang was most correct in pointing out that 1997 was an exciting and momentous year for us, and a most challenging one as well. Hong Kong's reunification with China and the formal establishment of the Government of the Hong Kong Special Administrative Region mark a new chapter in its history, a new era which will bear witness to the successful implementation of the concepts of "one country, two systems", "Hong Kong people running Hong Kong" and "a high degree of autonomy". The people of Hong Kong have lived up to the expectations of the Central Government and the whole nation. Over the past seven months or so, our society has remained stable and people have been going about their usual ways of life. We have announced the first "Policy Address" of the SAR Government , which was drawn up under the concept of "Hong Kong people running Hong Kong", setting the objectives and charting out the courses of our tasks for the coming years. The various programmes set out in the "Policy Address" have been progressing well so far. Since late October last year, Hong Kong has been hit by the unprecedented Asian financial crisis and "avian flu" incident. With wisdom and courage, the SAR Government and the entire community have made concerted efforts to overcome these critical challenges.

As Hong Kong is an international city, any change in the external environment will have a direct impact on its social and economic situations. The recent financial turmoil sweeping across Asia has not only caused great detriment to the neighbouring economies, but also dealt a hard blow to Hong Kong. It is under such circumstances that we have started our work for the year 1998. I am sure that with the joint efforts of the government and the whole community, our economy will be able to thrive through adversities and scale new heights. It is also clear that Hong Kong has now entered on period of economic readjustment. This readjustment would have come sooner or later anyhow, because for years we have been troubled by high land prices, soaring inflation and negative interest rates, with the result that our competitiveness has gradually lagged behind that of our competitors. Should this prevail, the continuous growth of our economy will be impeded. It is therefore inevitable that Hong Kong's economy should undergo structural readjustment. While the recent financial turmoil in Asia has inflicted a lot of pain on us, it has also catalysed the necessary readjustments of our economy. I hope the storm will soon calm down, and that Hong Kong's economy will complete its readjustment before long.

I am full of confidence that Hong Kong's economy will get out of scrapes soon after the financial turmoil is over. I am also full of confidence that the SAR Government will join hands with the whole community in times of trouble to solidify Hong Kong's economic foundation, properly utilize the resources and work for the well-being of the community. One of the reasons that we are able to look beyond the hard times to a bright future for Hong Kong is that we have the powerful backing of our nation. In addition, we have ample fiscal reserves, sound banking systems, as well as the resilience and wisdom of the people of Hong Kong, which will be brought into fuller play under the principle of "Hong Kong people running Hong Kong". At the same time, we can see that the economy of our nation, based on successful developments in the past few years, will certainly make faster and greater strides in 1998. Undoubtedly, Hong Kong's economy will benefit greatly from this.

Spring is in the air. For Hong Kong and Motherland, the prospects for growth are boundless. Hong Kong's capability to weather so many storms in the past goes to prove that it is an infinitely dynamic city, and that it has every promise of building an even more successful and prosperous future.

On behalf of the SAR Government, may I take this opportunity to wish Hong Kong continuous strength and thriving prosperity. May I wish Director Jiang and all of you good health, and all the people of Hong Kong good fortune, prosperity and happiness.